Covering the Kids
Who could be against health insurance for children? People who want government to run the whole health care system are counting on there not being very many.
That's why you see a big push to expand SCHIP, the state-run, federally subsidized program to provide health insurance to children whose families earn too much to qualify for Medicaid. Since children are the healthiest population age group and child health insurance is the cheapest insurance found anywhere, the theory must be that SCHIP is a lot less expensive than tackling a really serious problem.
One disadvantage of living in a democracy is that people actually get to vote on these things. Fearing something much worse, I joined with Gene Steurle (Urban Institute) a few years back with a simple proposal. Parents should show proof they have insured their children (by employer plan, Medicaid, direct purchases, etc) before claiming the $500 child tax credit (the tax code's reward to the middle class for having children).
Now that the credit has climbed to $1,000 per child, the case is stronger than ever. Republican members of Congress who passed on our tit-for-tat idea will now have to explain why only they and Ebenezer Scrooge want to deny families both a tax credit and free health insurance.
In the unlikely event that voters are inclined to listen, the arguments against SCHIP are quite strong. Harvard economist David Cutler and MIT economist John Gruber find that for every additional $1 spent on Medicaid, private insurance spending contracts by 50¢ to 75¢. For SCHIP expansion, Gruber estimates the contraction is 60¢.
If people can get free insurance from the state, they drop their private coverage. Or employers stop offering private coverage as a fringe benefit. The result: a massive shift of the burden from the private sector to taxpayers – while making only minor dent in the percent of people uninsured.
Also of the 8 million uninsured children in this country, fully 70 percent already qualify for Medicaid or SCHIP – their parents have just not bothered to enroll them!
Sorry if I ruined your day.
You made my day, after reading the dreary WSJ stories again.
I have repeatedly asked Greg (my co-author) about this issue of the overall cost of care for children, vs those expense that really drive health care spending. He says that the actuaries have that information. It’s sort a “who’s fooling whom” thing. SCHIP makes for good headlines, but accomplishes nothing, save perhaps making a mother nervous when a Medicaid-paid doctor discovers some minor abnormality in little Johnny that triggers a regimen of unnecessary tests and prescriptions.
I’ve begun using a balloon in my presentations, squeezing it this way and that until breaks.
John,
It’s not access to care, it’s a lack of responsible effectuation. It is available…
The real issue with expanding Medicaid for kids isn’t that more are covered, but that with every new person added to Medicaid roles, there is less have access to care. This is because the reality is Medicaid pays so poorly (frequently less than 1/3 of regular fees), that many clinics will not take new Medicaid patients. Enrolling a thousand or ten million new kids only makes the line longer to get this charity care.
Many clinics appointment desks set limits on how many Medicaid patients they see during a month. This is done to keep the cost of care reasonable for paying patients with and without insurance.
At around 1/3 reimbursement of regular fees, one could get a much more beneficial level of coverage for those in need by allowing the unreimbursed cost of charity care to be tax deductible at full rates (or tax credits at Medicaid rates) by providers of such care. Providers who currently provide little to no care for Medicaid would be falling all over themselves to provide enough care to make it so they paid no taxes. Unlike government programs, such as system would be naturally self limiting since eventually providers would max out how much charity care they could provide and get tax benefits for, while still being reasonably profitable. Such as system would also allow for the social marketplace to experiment with various options to promote wellness, preventive care, and other health care initiatives, many of whom are begrudgingly offered because they currently come with lots of managed care red tape and political strings.
Of course, don’t expect anything like this to ever happen because the political capital and credit for charity care would go to providers, not politicians…
Any study done on this grossly mismanaged care market is not worth the paper it’s written on. I believe our citizens, who earn the money and thus pay the cost, are the ones to decide what care is needed in consultation with their chosen health care professional! Why doesn’t anyone want to talk about this huge market distortions created by married couples having their work product used to support duplicate insurance coverage? Make the exclusion available to all citizens seems to offer a simple way to address this distortion IMHO.
[…] From the John Goodman Health Blog… Harvard economist David Cutler and MIT economist John Gruber find that for every additional $1 spent on Medicaid, private insurance spending contracts by 50¢ to 75¢. For SCHIP expansion, Gruber estimates the contraction is 60¢. […]
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